According to a study conducted by BDC in collaboration with the Université de Montréal, not enough people are starting businesses to replace those closing their doors
MONTREAL, Oct. 16, 2023 /CNW/ – Despite a population of 40 million, Canada has 100,000 fewer entrepreneurs than it did 20 years ago, according to a BDC study conducted in collaboration with the Université de Montréal Innovation Centre and Millénium Québecor and released as part of BDC Small Business Week.
This general trend is alarming. By 2022, only 1.3 person out of 1,000 had started a business, compared to 3 out of every 1,000 in the year 2000. “This is worrying because entrepreneurship is crucial to the economy, fueling innovation and economic growth,” points out Pierre Cléroux, Vice-President, Research and Chief Economist at BDC.
The report identifies several factors contributing to this decline, including low unemployment, high wages, an aging population and a more complex business environment.
The report also highlights a sad fact: one-third of new businesses close their doors within five years. “This situation shows the gap between the intention to start a business and entrepreneurial success,” says Pierre Cléroux. “To close this gap, it is important for entrepreneurs to acquire essential skills to launch and grow their businesses, especially in an increasingly complex business environment.”
The report identifies four distinct groups of skills needed to succeed in business: the most crucial being grit and relationship skills, which prove essential at all stages of a company’s growth.
- Grit and relationship skills
- Marketing and finance
- Leadership and people skills
- Operational administration skills
For Daniel Jutras, Rector of the Université de Montréal, this shows how important it is to better prepare those who want to start a business. ” With the work that has been done by BDC and Université de Montréal, we now have solid and valuable information with which we can develop training programs that address the concrete challenges faced by entrepreneurs, and that meet the needs expressed by our students. And that’s what all academics do: use reliable data to generate knowledge and pass it on,” he adds.
It is worth noting that BDC’s research carried out in collaboration with Université de Montréal has shown that business success is not linked to innate abilities, but that these skills can be actively developed and nurtured.
The study is based on the analysis of three online surveys, econometric analysis and the updated BDC Index of New Entrepreneurial Activity. Two surveys were conducted online by Angus Reid from March 2 to March 14, 2023: one among 1,259 Canadian SME owners who started a business more than two years ago, and the other among 1,001 Canadians aged 18 and over interested in starting a business in the next two years, or who already started a business less than two years ago. The same questionnaire was used by the Université de Montréal to survey its student population from June 12 to 21, 2023, resulting in 230 respondents.
As Canada’s bank for entrepreneurs, BDC is a partner of choice for all entrepreneurs looking to access the financing and advice they need to build their businesses and tackle the big challenges of our time. Our investment arm, BDC Capital, offers a wide range of risk capital solutions to help grow the country’s most innovative firms. We are one of Canada’s Top 100 Employers and Canada’s Best Diversity Employers. For more information on BDC’s products and services and to consult free tools, templates and articles, visit bdc.ca or join BDC on social media.
Deeply rooted in Montreal and dedicated to its international mission, Université de Montréal ranks among the top universities worldwide. With its affiliated schools, Polytechnique Montréal and HEC Montréal, UdeM attracts over $500 million in research funding every year, making it one of Canada’s top university research hubs. UdeM has close to 67,000 students, 2,300 professors and researchers, and an active global network of 450,000 alumni.
The Millénium Québecor program aims to cultivate entrepreneurial skills and support the realization of business projects. Its approach is inclusive and responsible: the program embraces all forms of entrepreneurship, related to professional practice or not, including non-profit organizations and social entrepreneurship.
SOURCE Business Development Bank of Canada
Featured image: Megapixl © Ipopba
